People who choose professional services as a career tend to be highly driven. Whether they are recent college graduates or are switching from another industry, they are eager to learn and advance. It is important for professional services firms to have formalized procedures for goal setting, coaching, training, and performance appraisal.

Many firms fail to provide satisfactory performance management programs for their employees. The average favorability of performance practices across industries is a dismal 30%. When employees feel that performance appraisals and associated advancement opportunities are unclear or unfair, they are likely to seek employment elsewhere.

One of the more popular methods for performance appraisals is known as “Objectives and Key Results” or “OKRs”. OKRs were first used by Andy Grove at Intel decades ago but were brought into the mainstream with their adoption at Google. Larry Page (cofounder of Google) claimed, “OKRs have helped lead us to 10x growth, many times over. They’ve helped make our crazily bold mission of ‘organizing the world’s information’ perhaps even achievable. They’ve kept me and the rest of the company on time and on track when it mattered the most.”

OKRs help set the strategy and goals for a period of time (usually a quarter) for teams and individuals. OKRs usually start at the highest level, with the CEO setting specific quarterly OKRs for the company. Each division and department then set their own OKRs that are in alignment with the company OKRs. Ideally, if the divisions successfully achieve their objectives, then the company as a whole will achieve its objectives. Eventually, OKRs make it down to the individual team and employee level.

The “objective” component of OKRs is a clearly defined goal. Each objective may be supported by one or more initiatives. An initiative is a plan with specific activities that will help achieve the objective.

The “key results” component of OKRs are specific measures used to track the achievement of the objective. Key results can’t be subjective and must be measured on a numerical scale (i.e. 0-100%, units, ratings, dollars, etc.). The idea behind numerical key results is that they can be quantitatively measured and easily scored at the end of the performance period. When the results cannot be quantitatively measured, they are open to interpretation, which weakens the effectiveness of any performance management process.

As an example of how OKRs can work in a professional services firm, let’s assume that Bob and his manager are working on his OKRs for the coming quarter. Bob is a software engineer and there have been some customer complaints about the quality of his source code. The following might be an OKR for Bob for this coming quarter:

Objective: Decrease the number of bugs in my code

Key Results:

• 3 or fewer defects per 100 lines of code written
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• 25% decline in the number of defects identified by the Quality Assurance team
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• 0 client complaints about buggy source code
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Note that each of the key results are quantifiable. The assessment of Bob’s performance will be objective and not subjective.

One of the benefits of having OKRs at every level of the organization is that they help tie an individual’s objectives to the overarching goals of the company. When each member of the company vigorously pursues his or her OKRs and those OKRs align with company goals, the cumulative positive impact on overall performance is significant.